“¢ Continues gaining positive traction for the third consecutive session.
“¢ Final EZ CPI print matches preliminary estimates and remains supportive.
“¢ Brexit worries to keep GBP bulls on the defensive and limit any downside.
The EUR/GBP cross held on to its positive tone, albeit retreated few pips from weekly tops following the release of final Euro-zone inflation figures.
After an initial dip to 0.8935 area, the cross regained positive traction and turned higher for the third consecutive session. The up-move stalled after the final Euro-zone consumer inflation figures showed monthly CPI print for July, both the headline and core CPI, were revised lower to -0.3% and -0.5% respectively.
However, the yearly rate matched original estimates, showing headline inflation rising by 2.1% and core CPI by 1.1%, and hence, did little to attract any fresh selling around the shared currency.
Meanwhile, the GBP bulls remain on the back-foot amid persistent Brexit uncertainties and might further contribute towards limiting any deeper retracement, at least for the time being.
With today’s key data out of the way, the cross now seems more likely to enter a bullish consolidation phase as investors now look forward to the UK government’s no-deal Brexit plan, expected to be unveiled today.
Nevertheless, the cross remains on track to end the week on a positive note and seems all set to post second consecutive weekly gains, though remains below 10-month tops set last week.
Technical levels to watch
Any subsequent up-move is likely to confront resistance near the key 0.9000 psychological mark, above which the cross seems all set to aim towards retesting multi-month tops, around 0.9030 area.
On the flip side, 0.8940-35 zone now seems to protect the immediate downside, which if broken might turn the cross vulnerable to head back towards challenging the 0.8900 round figure mark.
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